In today's looming confrontation the ratings agencies are playing the political role of "enforcer" as the gatekeepers to credit, to put pressure on Iceland, Greece and even the United States to pursue creditor-oriented policies that lead inevitably to financial crises. These crises in turn force debtor governments to sell off their assets under distress conditions. In pursuing this guard-dog service to the world's bankers, the ratings agencies are escalating a political strategy they have long been refined over a generation in the corrupt arena of local U.S. politics.
Why ratings agencies favor public selloffs rather than sound tax policy: The Kucinich Case Study...
Localities are pressured when their rising debt levels lead to a financial stringency. Banks pull back their credit lines, and urge cities and states to pay down their debts by selling off their most viable public enterprises. Offering opinions on this practice has become a big business for the ratings agencies. So it is understandable why their business model opposes policies - and political candidates - that support the idea of basing public financing on taxation rather than by borrowing. This self-interest colors their "opinions."
It goes to explain Kucinch saved Cleveland by raising taxes and refused to sell off its public electric utility along with heavy resistance to various political manipulations by banks.
It has been unclear to me why the finance sector wants to crash selected local economies. It's much clearer now. The point is to gain access to fire sale public assets. This article helps a lot to connect the dots.
CG